Well the spec is all important and should be in writing otherwise it's in the "eye of the beholder". This spec should not be "tech giberish" but defines the functionality required and the measure by which the program is determined complete.

The spec should be approved by the client. The delivery of the spec should be the 1st milestone so you can "smoke" out those who would be less than earnest in paying you.

The purpose of milestones is to allow client to gauge progress and the contracter to be paid incrementaly to avoid a lump sum payment which is often harder for some to either finance or "let go of" if the client misses a milestone payment you stop performing.

All of this can be done under a handshake agreement.

regards,

p